In turbulent times regular saving into an investment trust is one of the best ways of investing in the stock market. But some small savers are complaining they are being penalised by companies that favour lump-sum investors.

Investment trusts spread their portfolios across a wide range of shares, and by regularly drip-feeding money in, investors avoid the risk of investing a big sum in the market at a bad time. Other advantages of investment-trust savings schemes have traditionally been their low charges and low starting investments, from around £25 a month, which makes them ideal for small investors who want to gradually build up a lump sum in the stock market either for themselves, their children or grandchildren.

However, some savers are claiming that they are no longer valued by investment trust managers after a number of groups decided to stop running their own savings schemes and hand them over to another company, Alliance Trust Savings (ATS). Investors accuse ATS, a subsidiary of the Dundee-based Alliance Investment Trust, of penalising small savers by imposing high charges and favouring better-off lump-sum investors instead.

Unlike other schemes, which only offer their own products, ATS lets investors choose from any firm's trusts. It accepts investments from as little as £50, but charges a flat fee of £7.50 plus 0.2 per cent commission for purchases, except where the investment is with the Alliance Trust itself, when the charge is only £2.50.

For clients of Allianz Global Investors and Martin Currie, two of the groups that have switched their schemes to ATS, the increase in charges is significant. Previously, savers with Allianz Global Investors had only been charged 0.5 per cent, which worked out at just 25p if they were saving £50 a month. At Martin Currie, there had been no charge at all for purchases.

One investor incensed by the change-over is Gavin Spickett. He had previously saved into Hansa Trust, run by Close Investments, another group that has transferred its plans and which previously charged savers 1 per cent. 'I view the charges levied by ATS as exorbitant and specifically aimed at discouraging small, regular savers,' he says. 'From ATS's charging structure, they are clearly only looking for lump-sum investments of over £2,500, which is actually not the most cost-effective way of investing as it requires precise market timing.'

Another former Allianz Global investor, who had saved in Merchants Trust and Brunner Investment Trust for the past 15 years, says: 'I feel abandoned by Allianz. While ATS may be very slick, I don't feel it values small savers.'

Paul Darbyshire, who previously invested via Martin Currie, is livid about another charge levied by ATS. Having decided to cash in his holding, he found he was charged a £10 cheque fee. 'I could not believe that I was being charged £10 for Alliance to issue me a cheque for my own money. This just seemed like a money-grabbing exercise.'

Simon White, Allianz Global Investors' head of investment trusts, says his firm decided to transfer to ATS because the cost of running its own savings scheme was too high. He points out that most investors have benefited.

'Isa investors and many lump-sum savers will have found they got a cheaper deal, as well as benefiting from greater flexibility to invest in trusts from other houses and the online dealing and valuations which ATS offers,' he says. However, he acknowledges that some regular savers have 'regrettably seen their costs increase'.

At Martin Currie, it was decided to focus resources on investment and leave the savings plans and other products to a specialist provider.

Until now, most investment trust boards have been happy to subsidise the cost of their savings schemes in order to attract private investors. Before savings schemes were pioneered in 1984 by Foreign & Colonial, the only way investors could buy investment trusts was through stockbrokers. This made them unaffordable for small savers and trusts consequently became dominated by institutional investors.

Foreign & Colonial's low-cost savings scheme led to a revival of interest in investment trusts among private investors. Today, Foreign & Colonial still only charges savers commission of 0.2 per cent to buy its shares, which equates to just 10p if they are investing £50 a month. F&C spokesman Jason Hollands says: 'Savings plans are very popular among private investors. As a result of our scheme, more than 80 per cent of Foreign & Colonial shareholders are now private investors, and of these 37 per cent are regular monthly savers.'

ATS says it also values small investors and argues that its dealing charges are competitive, though it admits many of its customers are lump-sum investors. Kelly O'Donnell, managing director of distribution at ATS, says: 'We favour flat dealing charges rather than percentage charges that penalise investors as they build up their portfolios.' However, this is not much consolation for savers still trying to build up their capital. In response O'Donnell suggests: 'Regular savers can mitigate dealing charges by accumulating cash in a savings account and only investing lump sums once or twice a year.'

The alternative is to look for a cheaper option and several investment trust groups still offer free savings plans. They include Baillie Gifford, SVM Asset Management and Scottish Investment Trust; a full list can be found in Investment Trusts magazine. The globally diversified Scottish Investment Trust accepts savings of as little as £25 a month, while for investors who want a wider choice of investment trusts, Halifax Share Dealing also offers a low-cost regular savings scheme called ShareBuilder. This channels regular investments into any share, including investments trusts, from £20 a month and only charges a flat amount of £1.50 in commission.